The Trump administration is raising the application fee for U.S. citizenship. That will cost the U.S. later on.

A woman holds a cluster of U.S. flags during a U.S. Citizenship and Immigration Services naturalization ceremony in Oakland, California August 13, 2013. A total of 1,225 new citizens representing 96 countries took the oath. REUTERS/Robert Galbraith

In November, the Department of Homeland Security proposed increasing fees for all immigrants’ applications or requests, including a 61 percent hike in the fee for naturalization. The department also proposed eliminating the fee waiver program for potential low-income beneficiaries, which in 2017 served approximately 40 percent of applicants for naturalization. The comment period for these proposed changes ended Feb. 10, and DHS must now review the thousands of public comments before issuing a final rule in the Federal Register, possibly later this year. If realized, these fee increases would make it more expensive for eligible lawful permanent residents to become citizens of the United States – and for some, would put citizenship entirely out of reach.

Congress requires that U.S. Citizenship and Immigration Services, the agency that manages these tasks, pay its own way using the fees it collects for its services. Fees have been charged to cover some immigration services since the Immigration and Nationality Act of 1952. This requirement was reinforced in 1988 when Congress created the Immigration Examinations Fee Account (IEFA), allowing the USCIS’s predecessor agency to collect and retain its fees with the expectation that the fees would cover the agency’s costs.

In the past, the USCIS intentionally kept the filing fee for naturalization lower than its full adjudication cost to encourage permanent residents to integrate and become Americans. It did so by spreading out the uncollected costs among its many other petitions, including applications for permanent residency, for status as a temporary resident and for family reunification.

So what would be the likely consequences of these increases? Our research at the Immigration Policy Lab (IPL) at Stanford University suggests that the U.S. economy will probably suffer in ways that may outweigh the administrative cost of processing naturalization applications.

– Fewer immigrants to the U.S. become citizens than in other countries

The United States has lower naturalization rates than other immigrant-receiving countries. Various organizations and agencies try to encourage eligible immigrants to become citizens, including the New York State Office for New Americans (ONA). In partnership with the IPL, the ONA instituted a lottery for vouchers that covered the citizenship application fees of low-income immigrants, defined as those with household incomes between 150 percent and 300 percent of the federal poverty guidelines. Voucher recipients were twice as likely to apply for citizenship compared with lottery participants who did not win a voucher. This suggests that for some, the fees were a barrier to citizenship. Increasing the naturalization fee from $725 to $1,170, as DHS proposes, would raise that barrier higher, widening the naturalization gap with other immigration-accepting countries.

DHS is also proposing to eliminate the fee waiver program now available to the neediest applicants. People seeking citizenship were previously able to request that fee to be waived by sending individual requests and affidavits. In 2010, DHS streamlined that with a standardized application form and eligibility criteria. That reform allowed 73,000 immigrants per year to gain citizenship who otherwise would not have applied, especially immigrants with lower incomes, less-developed English-language skills and lower education levels – the types of immigrants the Trump administration wants to keep out rather than absorb. Over the past nine years, more than a half-million immigrants took advantage of the fee waivers to become citizens.

– Becoming a citizen raises incomes

The costs and benefits of citizenship have long been difficult to estimate, but a distinguished panel reporting to the National Academy of Sciences (NAS) found a consistent correlation between citizenship and higher employment and wages. Citizens earn higher wages and therefore pay more in taxes than permanent residents, also known as green-card holders, who under current immigration law can work and live in the United States for the rest of their lives, unless they commit certain crimes or infractions.

Why does citizenship increase wages? That’s not clear. People who apply for and receive citizenship may differ from those who don’t in some important way. In relevant research, political scientists Jens Hainmueller, Dominik Hangartner and Dalston Ward looked at Switzerland’s now-defunct referendum procedure for approving citizenship. Citizens in local areas would vote on each applicant, deciding whether to give them citizenship or just permanent residency. The researchers compared applicants who barely got citizenship with those who only just missed being approved, two groups that are almost identical except for winning or losing the citizenship referendum. They found that those applicants who did become citizens had higher annual earnings than those who did not. That increase was especially pronounced for immigrants with lower incomes or ethnic backgrounds who were targets of discrimination by employers.

To be sure, that was in Switzerland, not the United States. But combined with the National Academy study, this research suggests that when green-card holders become citizens, they earn more – and therefore pay more taxes.

Of course, economic gain is not the only reason to set policies. Those who want to discourage immigrants from becoming citizens may still support higher fees; those who want to encourage naturalization may prefer to lower those fees. All these decisions are complicated by the current congressional practice of requiring that the U.S. citizenship and immigration system fund its own operations. What we do know is that many eligible immigrants would like to become American citizens – but can’t afford it. And on average, naturalized citizens make more than green-card holders – and would contribute more to the U.S. economy in general.

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